Telstra 2002 Annual Report Download - page 188

Telstra Corporation Limited and controlled entities
185
Notes to the Financial Statements (continued)
1.12 Property, plant and equipment (note 12)
(continued)
(b) Revaluation (continued)
As part of the application of AASB 1041, we have also elected to:
• apply the cost basis of recording property, plant and equipment in
our financial statements; and
• deem all our revalued property, plant and equipment carrying
amounts as at 30 June 2000 to be their cost going forward. This
means that the asset revaluation reserve of $32 million is fixed as
at 1 July 2000 and writedowns of previously revalued assets may
no longer be made through the asset revaluation reserve.
We reduce the value of our property, plant and equipment to its
recoverable amount where our carrying amount is greater than
recoverable amount. Any writedown of this type is charged to the
statement of financial performance.
The profit or loss on disposal of assets written down to recoverable
amount is calculated as the difference between the carrying amount
of the asset at the time of disposal, and the revenue received on
disposal. This is included in the statement of financial performance in
the year of disposal.
The effect of capital gains tax has not been taken into account in
calculating the revalued amounts of property, plant and equipment.
(c) Depreciation and amortisation
Items of property, plant and equipment, including buildings and
leasehold property, but excluding freehold land, are depreciated or
amortised on a straight line basis over their estimated service lives to
us. We start depreciating or amortising assets when they are installed
and ready for use.
The service lives of our significant items of property, plant and
equipment are listed as follows:
We apply a unit method of accounting to assets where it is practical
and feasible and in line with commercial practice.
A group method of accounting is adopted for certain communication
assets. Group assets are automatically removed from our financial
statements on reaching the group life. Therefore, any individual asset
may be physically retired before or after the group life is attained.
The service lives and residual values (where applicable) of all assets
are reviewed each year.
Our major repairs and maintenance expenses relate to maintaining
our exchange equipment and the customer access network (CAN). We
charge the cost of repairs and maintenance, including the cost of
replacing minor items, which are not substantial improvements, to
operating expenses.
1.13 Leased plant and equipment (note 12)
We account for leases in accordance with Accounting Standard AASB
1008 “Leases”. We distinguish between finance leases, which
effectively transfer substantially all the risks and benefits incidental
to ownership of the leased asset from the lessor to the lessee, from
operating leases under which the lessor effectively retains all such
risks and benefits.
1. Summary of accounting policies (continued)
Telstra Group
As at 30 June
2002 2001
Property, plant and equipment
Service life
(years)
Service life
(years)
Buildings - general purpose . . . . . . 55 55
- fitout. . . . . . . . . . . . . 10 - 20 10 - 21
Communication assets
Buildings - network . . . . . . . . . . . 55 55
- fitout. . . . . . . . . . . . . 10 - 20 15 - 25
Customer premises equipment . . . . 3 - 8 3 - 8
Transmission equipment. . . . . . . . 5 - 16 7 - 16
Switching equipment. . . . . . . . . . 3 - 10 3 - 10
Cables . . . . . . . . . . . . . . . . . . . 8 - 25 9 - 25
Ducts and pipes - main cables . . . . 40 40
- distribution . . . . 30 30
Other communications plant . . . . . 4 - 18 4 - 18
Other assets
Leasehold plant and equipment . . . 7 - 15 9
Other plant, equipment and motor
vehicles . . . . . . . . . . . . . . . . . . 3 - 15 3 - 12